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U.S. Stocks Seeing Modest Strength, Dow Higher For Ninth Straight Session

Stocks have moved modestly higher during trading on Monday, adding to the strong gains posted last week. The major averages have all moved to the upside on the day, although buying interest has remained somewhat subdued.

Currently, the major averages are all in positive territory but off their highs of the session. The Dow is up 45.40 points or 0.1 percent at 39,558.24, the Nasdaq is up 43.24 points or 0.3 percent at 16,384.11 and the S&P 500 is up 3.78 points or 0.1 percent at 5,226.46.

The modest strength on Wall Street comes as stocks continue to benefit from recent upward momentum, which has led to an eight-day winning streak for the Dow.

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Renewed optimism about an interest rate cut by Federal Reserve in the coming months has contributed to the recent strength, although key inflation data due this week could have a significant impact on the outlook for rates.

The Labor Department is scheduled to release its reports on producer and consumer price inflation on Tuesday and Wednesday, respectively.

Economists expect producer prices to rise by 0.3 percent in April after edging up by 0.2 percent in March, while the annual rate of growth is expected to tick up to 2.2 percent from 2.1 percent.

Consumer prices are expected to climb by 0.4 percent in April, matching the increase seen in March. Core consumer prices, which exclude food and energy prices, are expected to rise by 0.3 percent in April after climbing by 0.4 percent in March.

The annual rate of consumer price growth is expected to dip to 3.4 percent in April from 3.4 percent in March, while the annual rate of core consumer price growth is expected to slow to 3.6 percent from 3.8 percent.

Remarks by Fed Chair Jerome Powell may also attract attention this week along with reports on retail sales, industrial production and housing starts.

Among individual stocks, shares of GameStop (GME) are soaring after social media persona “Roaring Kitty,” whose posts helped spark a frenzy of activity in the video game retailer’s stock in 2021, posted on X for the first time in three years.

Website building and hosting company Squarespace (SQSP) has also surged after entering into a definitive agreement to go private in an all-cash transaction valued at approximately $6.9 billion.

Sector News

Airline stocks are turning in some of the market’s best performances on the day, with the NYSE Arca Airline Index soaring by 3.1 percent.

American Airlines (AAL) and United Airlines (UAL) are posting notable gains after HSBC initiated coverage of the stocks with Buy ratings.

Biotechnology stocks have also shown a strong move to the upside, driving the NYSE Arca Biotechnology Index up by 1.6 percent to its best intraday level in a month.

Shares of Incyte (INCY) have spiked by 8.5 percent after the biotechnology company announced its Board of Directors approved a share repurchase authorization of $2.0 billion.

Networking, tobacco and telecom stocks are also seeing considerable strength on the day, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan’s Nikkei 225 Index edged down by 0.1 percent and China’s Shanghai Composite Index slipped by 0.2 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets have all moved modestly lower on the day. The U.K.’s FTSE 100 Index, the French CAC 40 Index and the German DAX Index are all down by 0.2 percent.

In the bond market, treasuries have rebounded following the pullback seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.5 basis points at 4.469 percent.

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